What is Philanthropy?

Philanthropy is a Greek word whose origins literally mean “love for mankind.” Contemporary use of the term refers to voluntary giving by individuals and organizations to promote the common good. Philanthropy is a fundamental human impulse. People of all economic means and cultures develop lifetime habits of donation and service to a wide range of causes—aiding family members and those less fortunate, sustaining communities and cultures, and working for systemic social change. Although public and private philanthropy in many countries at various stages of economic development are increasingly common, the United States has evolved the most institutionalized history of philanthropy—driven at least in part by federal-income-tax exemptions for contributions to organizations certified “charitable” or “nonprofit” by state governments.

This book is about “organized” philanthropy in the United States, philanthropy by foundations: tax-exempt nonprofit, charitable organizations created by individuals, families, and corporations with gifts of money, stock, or other resources invested to generate income used to make grants. In 2004, more than 66,000 foundations with over $476.7 billion in assets gave an estimated $32.4 billion in grants to nonprofit organizations to support a variety of activities, including research, health, education, arts, and culture as well as both systemic and charitable efforts to alleviate poverty and improve people’s lives.